My wife says I'm a Grinch.
Maybe she's right, at least in part. There's no time of year I, or more specifically, my wallet, loathes more than Christmas. And no, it's not just Madison Avenue's incessant pressure to spend, spend, spend that begins building mere moments after Halloween ends that gets my goat.
It's the Christmas cards -- and the stamps the U.S. Postal Service insists be placed on them.
Bill payers of the world, unite!
Ever since the new millennium kicked in, I've been on a quest to drive my use of postage stamps down to the bare minimum. I'm the cheapskate who sends his mom a free e-card on Mother's Day. But, hey, I haven't spent a dime on postage to pay a bill since 2002, when Wachovia introduced me to free online bill paying.
If you haven't noticed yet, online bill pay has become de rigueur. The major providers of online banking services -- Digital Insight
As a result, the only time I buy stamps these days is when my wife reminds me that it's time for the ritual mailing of Christmas cards. Aside from that once-a-year grudging acknowledgment that the USPS still exists, I'm "mailing" my payments for free.
Anybody want $17,655 -- for free?
Free is good -- $0.39 saved is $0.39 earned, after all. In fact, it's better -- $0.39 earned, and taxed at 28%, is only $0.28 saved once Uncle Sam has taken his cut. But still, it's just pocket change we're talking about, right?
Let's take a quick look at the savings an average American household can rack up just by cutting the USPS out of the monthly bill payment cycle. On average, I estimate that an average American family is on the hook for at least 18 billable services every month. Here's the rundown:
- Landline phone
- Cell phone
- Cable TV
- Car payment
- Car insurance
And of course, the biggie: credit cards. According to Cardweb.com, the average American household has eight of them, which brings us to 18 bills total. Multiply that by $0.39 per stamp, and your average household is paying the USPS $7.02 per month for the privilege of paying more money to other companies.
But $7 still isn't that much ...
Really? Are you telling me that if you were walking down the street one day, and saw a five-spot and two singles lying by the side of the road, you wouldn't stop to pick them up? Sure you would.
With free bill pay, you've got a chance to pick up $7 in free money every month. The only way to sweeten the deal is to take that money and invest it. Running the numbers through the Fool's handy-dandy compound interest calculator, I estimate that $7, saved monthly and invested in the stock market to compound at the historical rate of 10.5% per annum, turns into $17,655 after 30 years.
That's not a bad chunk of change from a simple money-saving tip. Remember that every penny saved (and invested!) can be a few more pennies earned.
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